Real Estate Terminology Explained

Buying a new home can be a daunting project. If this is your first time there will be words and phrases that are used that might as well be in a foreign language – terms like amortization, mortgage, buyer’s agency, appraisal, home inspections, property surveys, septic systems, and the list goes on. Even if you are a repeat buyer, some of these terms may still be a bit fuzzy, especially if you didn’t have the terms fully explained to you first time around. Sure, you could research the words yourself, however, it is nice to have them explained in one place, and you may not even realize there are others you could learn about.

Also, some terms I have included here may seem obvious but they have been included in order to have as complete a list as possible. However, since this is an introductory article meant to be an introduction to the terms used in the housing market, the information presented is by no means as in-depth as it could be. There could be pages written about each of the items included in this list.

Being an informed buyer is a great place to be when searching for your first home, whether for personal residence or for investment. You need to know what is involved in that dream property! TERMS Amortization – the process of spreading payments out over time. In real estate this is the length of time that an owner chooses to take to pay off the mortgage.

The amortization period is broken down into shorter lengths of time called terms. So a mortgage is spoken about in terms, for example, of a 30 year amortization with a term of 5 years. Appraisal – an unbiased determination of the value of a property, used to determine how much a home should be mortgaged for. Typically performed by qualified certified appraisers. Buyer’s Agent – a real estate agency agreement where the agent works for the buyer. It is becoming more and more popular to have buyer agency agreements signed by the prospective buyer, and this action provides benefits for both the agent and the buyer. The buyer benefits from the determined concerted effort the agent will provide for the buyer during the time of the contract. The agent benefits because if the buyer obtains a home anywhere other than through the agent, the agent will be compensated, again during the length of the contract. The length can be discussed and negotiated between the agent and the buyer.

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